Cited by Wall Street Letter in each of 2014, 2015 and 2016 for “Best Research / Broker-Dealer”, the QC is one of three distinctive market comment pieces produced by Mischler Financial Group.The QC is a daily synopsis of everything Syndicate and Secondary as seen from the perch of our fixed income trading and debt capital markets desk and includes a comprehensive “deep dive” with optics on the day’s investment grade corporate debt new issuance and secondary market data encompassing among other items, comparables, investment grade credit spreads, new issue activity, secondary market most active issues, and upcoming pipeline. To receive Quigley’s Corner, please email: rkarr@mischlerfinancial.com or via phone 203.276.6646

Today’s Friday IG Corporate dollar DCM featured 2 issuers that priced 2 tranches between them totaling $650mm as of this writing. The SSA space was quiet today. Please note that I scribed the below Best & Brightest IG Corporate primary market data download piece early this morning, so the data does not include today’s Murphy Oil and TC Pipelines deals.

Thanks! –RQ (In case you left early en route to the beach, the DJIA reached yet another new intra-day high today!)

As for next week, well British American Tobacco’s $49bn purchase of Reynolds American looks like it will manifest itself as the Company announced fixed income investor meetings for an expected mega cross currency transaction across USD, Euro and Sterling. The Senior Unsecured dollar-denominated portion will feature joint leads Bank of America/Merrill Lynch, Barclays, Citigroup, Deutsche Bank and HSBC. The three tranches could potentially raise $25b dollar equivalent. I am also hearing “chatter” of another big issuer lurking. We all know that after next week, it begins the traditional summer slowdown period. . But before that, the big push is on, so rest up this weekend, as next week’s syndicate midpoint average forecast calls for $34.29b to price. Factoring in that average amount to the $21b priced thus far in August would bring the MTD total to $55.29b. The forecast for August is $79.10bn so that would leave $23.81b to get done across the last three weeks of the month or an average of $7.93b. This ASSUMES that next week will reach the midpoint average forecast. I happen to think we could see $40b next week, which would push the average of each of the last three weeks of August down to $6bn.

But, before we all go away with our families, re-energize this weekend because next week will be a big one. Read all about it below from the pros who price all the deals in our IG dollar DCM. We’ll first review today’s primary and secondary market talking points, the growing geopolitical risk factors in our world, take a glance at the weekly and monthly IG primary market volume tables and then it’s onto the masters, maestros and mavens of syndicate who price all the deals in our IG dollar DCM.
Ready?.SET?..R-E-A-D!

Here’s how this week’s IG Corporate volume numbers measure up against the WTD and MTD syndicate estimates:

The IG Corporate WTD total is 110.84% of this week’s syndicate midpoint average forecast or $27.986b vs. $25.25b.

MTD we’ve priced 26.55% of the syndicate forecast for July or $21.00b vs. $79.10b.

There are now 5 issuers in the IG credit pipeline.

Today’s IG Primary & Secondary Market Talking Points

The average spreads across 2 of the 19 major industry sectors tied their post-Crisis lows. That’s 10.53% of the sectors.

Investment grade corporate bond trading posted a final Trace count of $19.6b on Thursday versus $19.9b on Wednesday and $19.6b the previous Thursday.

The 10-DMA stands at $17.4b.

The “QC” Geopolitical Risk Monitor

Risk Level/Main Factor

Geopolitical Risks

HIGHAsian Political Tensions

· N. Korea launches ICBM on 7/28. Jong-Un claims Hwasong-14 missile can reach any location on the U.S. continent. UN projects worst famine in NOKO in 17 yrs; last one killed 2mm (8% of population). Fear that NOKO may use nuclear intel/systems as barter for food w/”suspect” nations. U.S. has already sanctioned certain Chinese banks to pressure the PRC to use more influence over NOKO which has failed. U.S. lofts Trident missile in Pacific Ocean in response. China insiders say PRC does not have the influence on NOKO that the U.S. thinks it does.

ELEVATEDBREXIT Fallout

· U.K. PM May is on the hot seat. Macron-Merkel coalition to squeeze U.K. for all it can. France pressing for $115b equivalent.
Venezuela – civil unrest as Maduro dictatorship claims bogus election outcome favors unlimited powers and a new constitutional assembly in elections that U.S. and key LATAM nations will not acknowledge. Caracas named most dangerous city in the world with highest murder rate. VZ gov’t stopped publishing crime stats a decade ago. Dictatorship in our Western Hemisphere. U.S. Tsy. freezes Maduro family assets.

· Increased chance of 2018 U.S. recession in light of recent very hawkish Fed-speak?; “Maybe” one more rate hike in 2017; lack of inflation and $4.5 trillion balance sheet unwind are concerns.

Syndicate IG Corporate-only Volume Estimates This Week and August

IG Corporate New Issuance

This Week
7/31-8/04

vs. Current
WTD – $27.986b

August 2017

vs. Current
MTD – $21.00b

Low-End Avg.

$24.21b

115.60%

$78.37b

26.80%

Midpoint Avg.

$25.25b

110.84%

$79.10b

26.55%

High-End Avg.

$26.29b

106.45%

$79.83b

26.31%

The Low

$15b

186.57%

$60b

35.00%

The High

$35b

79.96%

$100b

21.00%

The “Best and the Brightest” Syndicate Forecasts and Sound Bites re New IG Debt Issuance Next Week

I am happy to announce that the “QC” once again received 100% unanimous participation from all 24 syndicate desks surveyed for today’s “Best & Brightest” edition! Thank you to all of them. 21 of those participants are among 2017’s YTD top 22 ranked syndicate desks according to today’s Bloomberg’s U.S. IG U.S. Investment Grade Corporate Bond underwriting league table.

*Please note that these are Investment Grade Corporates only. They do not include SSA issuance unless otherwise noted.

As always “thank you” to all the syndicate desks that participated in today’s survey. I greatly appreciate your time to contribute and for making this edition of the “QC” among the most widely read! You are helping to promote Mischler’s value-added DCM proposition while adding readership to the “QC” that won Wall Street Letter’s Award as Best Broker Dealer Research in our financial services industry for three consecutive years! That’s 2014, 2015 and 2016 !!

The preface to the weekly canvass of the top fixed income syndicate desk teams begins with the following background-Entering this morning’s Friday session, here are this week’s IG new issue volume talking points:

The IG Corporate WTD total outperformed once again with issuance 108.26% of the syndicate midpoint average forecast or $27.336b vs. $25.25b.

MTD we have now priced 25.73% of the syndicate projection for August IG Corporates or $20.35b vs. $79.10b.

Entering today’s session, the YTD IG Corporate-only volume is $862.833b vs. $843.591b on August 3rd, 2016 or 2.28% more than a year ago.

The all-in or IG Corporate plus SSA YTD volume is $1,054.568b vs. $1,077.377b on August 3rd, 2016 or 2.16% less than the year ago total.

Entering this morning’s session, here are the five key primary market driver averages from the 42 IG Corporate-only deals that priced this week:

NICS: 0.06 bps

Oversubscription Rates: 3.34x

Tenors: 11.96 years

Tranche Sizes: $651mm

Spread Compression from IPTs to the Launch: <18.56> bps

Here’s how this week’s critical primary market data compares against last week’s entering this morning’s session:

Average NICs tightened 1.62 bps to an average 0.06 bps vs. 1.68 bps across this week’s 42 IG Corporate-only new issues.

Over subscription or bid-to-cover rates, the measure of demand, slightly increased by 0.04-times to 3.34x vs. 3.30x.

Average tenors contracted by 1.07 years to an average 11.96 years vs. 13.03.

Tranche sizes decreased by $861mm to $651mm vs. 1,512mm. Last week featured the $22.5bn 7-part transaction for AT&T which boosted the average tranche size.

Spread compression from IPTs to the launch/final pricing of this week’s 42 IG Corporate-only new issues widened by 2.59 bps to <18.56> bps vs. <21.15>.

Spreads across the four IG asset classes widened 2 bps bps to 6.00 bps vs. 4.00 bps as measured against their post-Crisis lows.

The 19 major industry sectors also widened 2.36 bps to 9.89 vs. 7.53 bps also as measured against their post-Crisis lows.

For the week ended August 2nd, Lipper U.S. Fund Flows reported an inflow of $1.485b into Corporate Investment Grade Funds (2017 YTD net inflow of $79.114b) and a net inflow of $20.818m into High Yield Funds (2017 YTD net outflow of $6.663b).

Taking a look at the secondary trading performance of this week’s IG and SSA new issues, of the 50 deals that printed, 26 tightened versus NIP for a 00% improvement rate, 13 widened (26.00%), 9 were flat (18.00%) and 2 were not available (4.00%) or N/A.

Entering today’s Friday session here’s how much we issued this week:

IG Corps: $27.336b

All-in IG (Corps + SSA): $31.986b

And now ladies and gentlemen, it’s time for the guy-in-the corner, to ask today’s question, “what are your thoughts and numbers for next week’s IG Corporate new issue volume?”

Throughout the last several weeks more than a few strategists and commentators have been warning investors of overvalued and overbought equities markets. Calls were being made to head for the exit. Yet, for reasons known and unknown, investors kept plowing money into the market. Lack of volatility, low interest rates, cheap oil, tame inflation and favorable business policy drew investors in to US [and global] equities markets as they did not heed the warnings. To understand this, we should look at the hikers that attempt to conquer Mt Everest. Those mountaineers are well aware that peril could be met with a slight slip of foot or unforeseen storm, yet they trudge forward for the glory and euphoria of reaching the top. Likewise, investors today are presumably well aware of the risks (until they’re not!) and this week, the glory of new all-time highs as well as very good earnings and a strong jobs report made the voyage worth it.

Larry Peruzzi, Managing Director

We had another heavy earnings week. So far, this recent quarter is shaping up as the best earnings season in 7 years, with 77% of companies reporting beating estimates. Economics-wise, this week‘s June Pending home sales, June Personal spending, July ISM manufacturing and June factory orders all came in at or very close to estimates. Price deflator and personal income data was dovish. The major economic release was Friday’s July employment report. Unemployment dropped to 4.3% as expected and non-farm payrolls added a better than expected 209,000 jobs. Average hourly earnings met estimates at +.3% M/M which at a +2.5% Y/Y rate should NOT ignite any inflation fears.

The Washington/Russia/North Korea/Venezuela soap opera drama continues. The Trump administration cabinet turnover is reaching a record pace, but none of this seems to be enough to spook the markets. Possible new sanctions against Venezuela help lift oil close to $50 a barrel but many U.S refineries have been fitted, at sizeable cost, to refine Venezuela’s heavy type of crude so look for a fair amount of politicking here.

Looking ahead to next week, earning season is nearing its end with just 206 companies due to report. Also due are Consumer credit on Monday, 2Q non-farm productivity and labor cost on Wednesday, July PPI data on Thursday and July CPI data on Friday.

With the DOW at 22, 000 and the economy close to being at full employment, analysts and investors will closely monitor any type of inflationary pressure which might cause the FED to raise rates at a faster pace or possibly, amplify asset sales. So, we will be listening to speeches by Fed governors Bullard, Kashkari, Dudley next week ahead of the August 16th FOMC meeting minutes. With global growth, low inflation, low energy prices and emerging market growth investors will be cautiously move forward as we scale the peak.

Larry Peruzzi

Managing Director International Trading

Mischler Financial Group

Investment Banking | Institutional Brokerage

Larry Peruzzi is a 20 yr global trading markets veteran and brings a unique perspective to global equities market commentary via Mischler Financial Group, the securities industry’s oldest minority broker-dealer owned and operated by service-disabled veterans. Larry’s experience and best execution perspective stems from his sitting on ‘both sides of the aisle.’ For more than half of Larry’s career, he ran buy-side trading desks for Standish Mellon and thereafter, The Boston Company. In both of those roles, Larry was responsible for implementing and managing international equities trade execution. Larry’s perspectives are frequently cited by the leading financial news publishers, including The Wall Street Journal, Bloomberg LP and Reuters

Peruzzi’s Perch is a weekly synopsis of Everything Equities as seen from the perch of Mischler Financial Group’s International Equities Desk. Cited by Wall Street Letter in each of 2014, 2015 and 2016 for “Best Research / Broker-Dealer”, Peruzzi’s Perch is one of four distinctive content pieces produced by Mischler Financial Group

Cited by Wall Street Letter in each of 2014, 2015 and 2016 for “Best Research / Broker-Dealer”, the QC is one of three distinctive market comment pieces produced by Mischler Financial Group.The QC is a daily synopsis of everything Syndicate and Secondary as seen from the perch of our fixed income trading and debt capital markets desk and includes a comprehensive “deep dive” with optics on the day’s investment grade corporate debt new issuance and secondary market data encompassing among other items, comparables, investment grade credit spreads, new issue activity, secondary market most active issues, and upcoming pipeline. To receive Quigley’s Corner, please email: rkarr@mischlerfinancial.com or via phone 203.276.6646

Today’s IG Corporate dollar DCM finished with 11 issuers pricing 15 tranches between them totaling $6.986b. The SSA space was quiet today. It seemed much busier than today’s final tally given the 15 tranches but if you’ll recall several syndicate desks did comment in last Friday’s “QC” survey for this week’s IG Corporate new issue volume that it would seem busier given the expectation for lots of smaller sized deals.

………….Here’s how this week’s IG Corporate volume numbers measure up against the WTD and MTD syndicate estimates:

The IG Corporate WTD total is 27.67% of this week’s syndicate midpoint average forecast or $6.986b vs. $25.25b.

MTD we’ve priced 143.28% of the syndicate forecast for July or $120.926b vs. $84.40b.

There are now 6 issuers in the IG credit pipeline.

July 2017 finished as the second highest volume July on record for IG Corporates at $120.876b as well as for all-in IG supply (Corporates plus SSA) – $141.476b.

N. Korea launches ICBM on 7/28. Jong-Un claims Hwasong-14 missile can reach any location on the U.S. continent. UN projects worst famine in NOKO in 17 yrs; last one killed 2mm (8% of population). Fear that NOKO may use nuclear intel/systems as barter for food w/”suspect” nations. U.S. has already sanctioned certain Chinese banks to pressure the PRC to use more influence over NOKO which has obviously failed. Tensions are mounting.

ELEVATEDBREXIT Fallout

U.K. PM May is on the hot seat. Macron-Merkel coalition to squeeze U.K. for all it can. France pressing for $115b equivalent. Venezuela – civil unrest as Maduro dictatorship claims bogus election outcome favors unlimited powers and a new constitutional assembly in elections that U.S. and key LATAM nations will not acknowledge. Caracas named most dangerous city in the world with highest murder rate. VZ gov’t stopped publishing crime stats a decade ago. Dictatorship in our Western Hemisphere. U.S. Tsy. freezes Maduro family assets.

Mischler Muni Market Market Update for the week of 07-31-17 looks back to last week’s metrics and provides a focused lens on pending muni bond issuance scheduled for the upcoming week. As always, the Mischler Muni Market Outlook provides public finance investment managers, institutional investors focused on municipal debt and municipal bond market participants a summary of prior week’s municipal debt activity, including credit spreads and money flows, and a curated view of pending municipal finance offerings scheduled for this week’s issuance.

Last week muni volume was about $4.2 billion. This week volume is expected to be $7.2 billion. The negotiated market is led by $1.1 billion senior and subordinate bonds for the Bay Area Toll Authority, California. The competitive market is led by $388.9 million tax-exempt and taxable general obligation bonds for Portland Public School District #1J, Oregon on Thursday. Commonwealth of Massachusetts is selling $1.5 billion GO RANs at competitive sale on Wednesday.

Below and attached is neither a recommendation or offer to purchase or sell securities. Mischler Financial Group is not a Municipal Advisor. For additional information, please contact Managing Director Richard Tilghman at 203.276.6656

For reading ease, please click on image below

Since 2014 alone, Mischler Financial Group Inc.’s presence across the primary Debt Capital Markets space has included underwriting roles in which Mischler has led, co-managed and/or served as selling group member for more than $600 Billion (notional value) in new debt and preferred shares issued by Fortune corporations, as well as debt issued by various municipalities and US Government agencies.

Mischler Financial Group is the securities industry’s oldest minority broker-dealer owned and operated by Service-Disabled Veterans. Mischler is also a federally-certified Service-Disabled Veteran Owned Business Enterprise (SDVOBE). Mischler Muni Market updates are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

This document may be not reproduced in any manner without the permission of Mischler Financial Group. Although the statements of fact have been obtained from and are based upon sources Mischler Financial Group believes reliable, we do not guarantee their accuracy, and any such information may be incomplete. All opinions and estimates included in this report are subject to change without notice. This report is for informational purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Veteran-owned broker-dealer Mischler Financial Group, its affiliates and their respective officers, directors, partners and employees, including persons involved in the preparation of this report, may from time to time maintain a long or short position in, or purchase or sell a position in, hold or act as market-makers or advisors or brokers in relation to the securities (or related securities, financial products, options, warrants, rights, or derivatives), of companies mentioned in this report or be represented on the board of such companies. Neither Mischler Financial Group nor any officer or employee of Mischler Financial Group or any affiliate thereof accepts any liability whatsoever for any direct, indirect or consequential damages or losses arising from any use of this report or its contents.

Cited by Wall Street Letter in each of 2014, 2015 and 2016 for “Best Research / Broker-Dealer”, the QC is one of three distinctive market comment pieces produced by Mischler Financial Group.The QC is a daily synopsis of everything Syndicate and Secondary as seen from the perch of our fixed income trading and debt capital markets desk and includes a comprehensive “deep dive” with optics on the day’s investment grade corporate debt new issuance and secondary market data encompassing among other items, comparables, investment grade credit spreads, new issue activity, secondary market most active issues, and upcoming pipeline. To receive Quigley’s Corner, please email: rkarr@mischlerfinancial.com or via phone 203.276.6646

Today’s IG Corporate dollar DCM finished with 4 issuers pricing 11 tranches between them totaling $26.00b. The SSA space wisely stood down. Clearly, the day was all about AT&T’s mega $22.5bn 7-part SEC registered Senior Global Notes new issue. The transaction ranks as the third largest in history behind only Verizon Communication’s $49b deal on 9/11/2013 and Anheuser Busch InBev’s $46bn 1/13/2016. The deal is also the largest of this very prolific year-to-date thus far. What’s more, AT&T also pushed us over the $1 trillion mark for all-in IG Corporate and SSA issuance YTD. AT&T (A-/BBB+) agreed to buy Time Warner (Baa2/BBB+) for $85.4b. This follows Comcast’s purchase of NBCUniversal and Verizon’s acquisition of Yahoo. Both AT&T and Time Warner boards approved the deal that now has to overcome a few regulatory hurdles. AT&T hopes to complete the transaction by the end of 2017. To finance the half cash, half stock deal involved AT&T taking on $40b in bridge loans prior to today’s announced deal.

The DJIA closed at another all-time high at 21,796 up 85 points.

Here’s how this week’s IG Corporate volume numbers measure up against the WTD and MTD syndicate estimates:

The IG Corporate WTD total is 151.38% of this week’s syndicate midpoint average forecast or $36.30b vs. $23.98b.

MTD we’ve priced 135.00% of the syndicate forecast for July or $113.94b vs. $84.40b.

· Increased chance of 2018 U.S. recession in light of recent very hawkish Fed-speak?; “Maybe” one more rate hike in 2017; lack of inflation and $4.5 trillion balance sheet unwind are concerns.

Syndicate IG Corporate-only Volume Estimates This Week and July

IG Corporate New Issuance

This Week
7/24-7/28

vs. Current
WTD – $36.30b

July 2017
Forecasts

vs. Current
MTD – $113.94b

Low-End Avg.

$23.52b

154.34%

$83.87b

135.85%

Midpoint Avg.

$23.98b

151.38%

$84.40b

135.00%

High-End Avg.

$24.71b

146.90%

$84.92b

134.17%

The Low

$15b

242.00%

$70b

162.77%

The High

$40b

90.75%

$111b

102.65%

AT&T Corp. $22.5b 7-Part Deal Dashboard

Mischler was once again proud and honored to serve as an active Co-Manager on today’s behemoth AT&T 7-part.

Today’s 7 tranches posted a cumulative average spread contraction of <18.43> bps through price evolution or from IPTs to the launch and final pricing.

Here’s a look at how it all evolved:

ATT Issue

IPTs

GUIDANCE

LAUNCH

PRICED

Spread
Compression

NICs
(bps)

5.5yr FRN

3mL+113a

3mL+94a (+/-5)

3mL+89

3mL+89

<24> bps

15

5.5 yr FXD

+125a

+105a (+/-5)

+100

+100

<25> bps

15

7yr FXD

+150a

+135a (+/-5)

+130

+130

<20> bps

12

10yr FXD

+175a

+165a (+/-5)

+160

+160

<15> bps

9

20yr FXD

+215a

+205a (+/-5)

+200

+200

<15> bps

1

32.5yr FXD

+240a

+230a (+/-5)

+225

+225

<15> bps

<7>

41yr FXD

+255a

+245a (+/-5)

+240

+240

<15> bps

<7>

..here’s a look at final book sizes and over-subscription rates that amounted to $58.5b for an overall bid-to-cover rate of 2.60x:

AT&T Issue

Tranche Size

Final Book
Size

Bid-to-Cover
Rate

5.5yr FRN

$750mm

$3.2bn

4.27x

5.5yr FXD

$1.75bn

$5.8bn

3.31x

7yr FXD

$3bn

$8.3bn

2.77x

10yr FXD

$5bn

$12.4bn

2.48x

20yr FXD

$4.5b

$10.4bn

2.31x

32.5yr FXD

$5b

$11.1bn

2.22x

41yr FXD

$2.5b

$7.3bn

2.92x

A Look at How AT&T Supports Our Veterans

First, let’s make it clear to everyone that AT&T understands that members of the military and their families make great sacrifices for our great nation and often confront unique challenges during periods of deployment and throughout their return to civilian life. AT&T understands that corporations have an important role to play in supporting our veterans. So, for nearly 100 years – that’s right – a century – AT&T has remained dedicated to supporting military personnel, veterans and their families. Our nation’s service men and women make sacrifices to protect our country and our freedoms. AT&T understands that is their honor to support them at home and abroad. Moreover, military veterans possess the skills and experience it needs to succeed as a company and knows they are an invaluable part of its work force. For that all of us here at Mischler Financial send out a five-star salute to AT&T from the top down and especially today to the entirety of its Treasury/Funding team that carved out another memorable place in our IG dollar Debt Capital Markets history with today’s $22.5 billion seven-part transaction.

Some of the Ways that AT&T Supports Our Nation’s Veterans –

Recruiting and Hiring Military Veterans

AT&T integrated veteran recruitment into its business practices for years. The Company focuses on recruiting veterans not only because it’s the right thing to do, but also because it’s good for its business. In the past few years, AT&T enhanced its military recruitment programs by increasing their promotion of AT&T as an employer of choice within the veteran community. That includes maintaining a Military Talent Attraction Program Manager to inform the military about AT&T and educate AT&T managers about the military.

Online Tools and Resources

AT&T understands that the job search and application process at large companies can be challenging for anyone — and even more so for veterans. Therefore, it created online tools, resources and checkpoints to optimize success through its recruitment process, such as:

A Military Skills Translator Tool that allows veterans to use their current Military Occupation Code or Military Occupation Specialty to identify civilian jobs at AT&T that may be a good fit for them: http://att-veterans.jobs/

The Careers for Veterans program, which is designed to support veterans moving into civilian life by providing career advice and insight on AT&T jobs: http://veterans.att.jobs

An AT&T Military Timeline to help guide veterans step-by-step through their transition to the civilian/corporate workforce

A career page for military spouses highlighting work locations that provides portable, flexible jobs: att.jobs/milspouse

Stepping up AT&T’s Hiring Commitment

AT&T actively focuses on recruiting veterans into career paths because the experience and skills gained through military service are an invaluable contribution to its workforce.

In 2013, AT&T announced a commitment to hire 10,000 veterans over the course of the next 5 years. That’s a commitment that was reached in 2015 – well ahead of schedule. In May of 2016, AT&T announced that it would double its original commitment by hiring an additional 10,000 veterans – for a total of 20,000 – by 2020.

AT&T is also a founding member of the Veteran Jobs Mission, launched in 2011 by JPMorgan Chase & Co. and 10 other companies to commit to hiring 100,000 veterans by 2020. Since then, the coalition has grown to more than 230 private-sector companies that represent almost every industry in the U.S. economy. Collectively, members have hired more than 395,261 veterans since 2011.

Once veterans are hired, AT&T helps ensure they have the skills needed to grow their careers and succeed as employees in the ever-evolving technology landscape.

Veteran Employee Resource Group

The AT&T Veterans employee resource group (ERG) was founded in 1983 and now serves more than 10,200 members in 40 chapters across the U.S. It’s an independent organization of AT&T employees and retirees dedicated to serving the veteran and active military community.

The ERG creates an instant community for veterans joining the company and involves them in outreach, philanthropy and volunteer opportunities – including ways to refer fellow veterans for jobs at AT&T. Members of this ERG serve as career ambassadors and represent AT&T at veteran career events.

At AT&T’s 8th annual National ERG Conference in September 2016, the AT&T Veterans-Washington State chapter was recognized for its Operation Santa program, which supports homeless vets and those in VA hospitals and retirement homes during the holidays.

Named to US Veterans magazine’s Best of the Best – Top 10 Veteran-Friendly Companies list

Named to US Veterans magazine’s Top 10 Supplier Diversity Programs list

AT&T’s Support for Organizations Include:

Blue Star Families

AT&T supports veterans and military families through many financial contributions, programs and collaborations with organizations dedicated to service men and women. AT&T supports Blue Star Families at their networking events for military spouses and in their mission to honor and empower military families through no-cost programs available to members nationwide.

Cell Phone for Soldiers
AT&T has a long-standing mission to connect members of our nation’s military with their loved ones back home. Initiated in 2004, and expanded through financial support from AT&T, Cell Phones for Soldiers is a non-profit that uses funds from recycled cell phones to buy prepaid phone cards for our service men and women, helping them connect with their families.

Supporting Veteran-Owned Business

Since 1968, the AT&T Global Supplier Diversity organization has connected certified diverse service-disabled veteran-, minority-, women-owned business enterprises with opportunities to provide products and services to AT&T around the world. AT&T is committed to working with veteran-owned suppliers through its mentoring programs.

AT&T Scholarship ProgramsIn 2016, AT&T continued to offer executive-level scholarships to diverse suppliers, including veterans, as part of its commitment to provide educational support to diverse-owned businesses. Five scholarships were awarded nationally to diverse-owned business representatives to attend an executive training class. Classes were offered through the following programs:

The Advance Management Education Program (provided by National Minority Supplier Development Council)

Building a High Performing Minority Business Program (provided by Tuck School of Business at Dartmouth

Tuck-WBENC Executive Program (provided by Women’s Business Enterprise National Council)

The AT&T Business Growth Acceleration Program
The AT&T Business Growth Acceleration Program provides mentorship to a select group of qualified business leaders, including veterans. The program focuses on improving participants’ business operations and enhancing their abilities to win corporate contracts. The practical, hands-on learning approach enables each participant to immediately apply concepts learned to their individual business challenges. During 2016, the program was led by the John F. Kennedy Institute of Entrepreneurial Leadership and there were 12 graduates from this AT&T-sponsored JFK University Business Growth Acceleration Program.

Additionally,

Through the full year ending 2016, AT&T’s spend with service disabled veteran-, veteran-, minority and women-owned business enterprises firms, among others, was $14.2bn.

AT&T’s percent of total spend with service disabled veteran-, veteran-, minority and women-owned business enterprises is 83%.

That is a great story about some of the wonderful things Corporate America’s AT&T is doing for our veterans. It’s a story that needs to be told to Main Street U.S.A. I’ll always do my part to get Corporate America’s story out there. The next deal could by YOUR deal and YOUR story. Today, however, belonged to AT&T. Thank you AT&T from the top down. Thank you also to JPM, BAML, GS, Mizuho and MUFG Syndicate for working with us today.

Have a great evening!

Ron Quigley, Managing Director and Head of Fixed Income Syndicate

Below please find my synopsis of everything Syndicate and Secondary from today’s debt capital markets, including the investment grade corporate bond data drill down as seen from my seat here in Syndicate, Sales and DCM.

Today’s IG Corporate dollar primary market featured only one domestic issuer – Marathon Oil – among two other Yankee issuers. 3 issuers priced 4 tranches between them totaling $2.30b. The SSA space contributed 1 deal, the well-telegraphed $5.00b 4-part for JBIC that boosted the session’s all-in IG Corporate and SSA day total to 4 issuers, 8 tranches and $7.30b.

Here’s how this week’s IG Corporate volume numbers measure up against the WTD and MTD syndicate estimates:

The IG Corporate WTD total is 146.79% of this week’s syndicate midpoint average forecast or $26.79b vs. $18.25b.

MTD we’ve priced 38.55% of the syndicate forecast for June or $32.54b vs. $84.40b.

There are now 5 IG Corporate, Yankee and/or SSA new issues in the IG credit pipeline.

So, tomorrow we finally kick off six-pack U.S. bank earnings with Citigroup, J.P. Morgan and Wells Fargo reporting. Next Tuesday is BAML and Goldman Sachs followed by Morgan Stanley on Wednesday. Hopefully these market leaders break open the issuance drought in short order and subsequently lead the way for all the issuance universe who they bank up to the traditional mid-August thru Labor Day slow-down.

The BAML Q3 Outlook Call*Please note that this sub section is discerned from my own note taking. I own any/all discrepancies or inaccuracies vs. the call although I represent there should be none. Thanks! -RQ

High Yield issuance is up 20% YoY but all related to Q1 volume. Looking at Q2 business, issuance is down $10b YoY. From a sector perspective HY saw big pick-ups in the Industrial, Healthcare and Energy sectors. There was a notable fall-off in the TMT sector. The remaining sectors have been fairly consistent YTD. Two-thirds of high yield issuance has been motivated by re-financings. M&A volumes continue to represent about 20% of HY issuance volume. Pick-ups were seen in triple-“CCC” rated issuance to $17b from $4b. Euro issuance represented about €32b and a hefty £10b. Euro and Sterling issuance continues to illustrate overall growth for HY issuance.

BAML holds strong convictions for re-financing trades as issuers can lock in highly favorable long-term rates in here and looking forward. $50b is committed to M&A financings for the remainder of the year predominantly focused on longer tenors with $10b of that in new HY issuance.

……and now for the High Grade Issuance Outlook

BAML Syndicate’s Kevin Barthelmes did a great job pinch hitting for Dan Mead today in reviewing YTD new issuance as well as the 2H 2017 Outlook.

Here is all the stuff you WANT and NEED to know:

YTD IG ex-SSA supply volume for the first half of 2017 is up 1.8% YoY. (The “QC” IG Corporate-only count is $754b YTD). BAML had called for a 5-7% decline in IG issuance for 2017 at the end of last year. The YTD split is as follows: $430b (Corporates) down <3.5%> YoY and $300b (Financials) up 10% versus 2016. Issuance pressure was seen mostly from the M&A space that was markedly down year-over-year. YTD M&A driven issuance is expected to be $140b-145b or 10% of IG overall supply. In 2016 we saw $290b which represented 20% of issuance in 2016.

In terms of the back half of 2017, the themes are similar to Q2 2017. Expectations are for corporate supply to be down on the year given the decline in M&A. This July, we expect issuance to be down about 12% versus last year. We also experienced a robust August and September in 2016 which is not expected this year. Keep in mind that Q1 2017 was a record breaking quarter in terms of new issuance. Additionally, Q4 2016 saw companies motivated to price deals ahead of last November’s Presidential election that boosted volumes. BAML does not expect a repeat of July through September again this year.

FRNS and Callable Structures En Vogue

2-, 3- and 5-year FRN issuance is up 40% to 45% YTD with lots of that volume originating from Asia. Notably, we are also expecting more callable structures, for example, 2NC1 and 3NC2 issuance. Expect to see a continuance of that in the second half of the year. It does not feel as though issuers are getting worried about rates at all. Dialogue outside of M&A has been primarily on liability management issuance of which we’ve had roughly $40b YTD. Expect another $40b in LM issuance in the second half as well which would represent a 10-15% increase versus 2016.

So, to recap, here are the issuance outlook themes for the second half of 2017:

Lack of supply

Continued FRN demand and callable structures

Liability Management issuance

Strong Capital/Low Growth

Thank you to all those a who contributed on today’s BAML Outlook Call and in particular I’d like to send shout-outs to the always differentiating intel and commentaries from those who spoke from the sectors I cover here at Mischler – namely Hima Inguva (Banks) and Peter Quinn (Electric Utilities & Power). Listening is always the most informative form of communication.

Today’s IG Primary & Secondary Market Talking Points

For the week ended July 5th, Lipper U.S. Fund Flows reported an inflow of $2.299b into Corporate Investment Grade Funds (2017 YTD net inflow of $71.493b) and a net outflow of $1.144b from High Yield Funds (2017 YTD net outflow of $8.865b).

I have written here over and over that the United States is the best story out of a lot of otherwise bad stories throughout our inextricably global-linked world economy. Make no mistake about it, however, we are the best and the greatest nation on the face of the earth. We should all take pause to recall that tomorrow as we take in the scents of our barbecues, the tastes of our beers and the fun in the sun of Independence Day. The United States IS the engine that the world looks to when there are wildfires all around as there are now. At the foot of Mt. Rushmore are bronze plaques featuring prominent quotes from each of the four Presidents whose faces are carved into granite. My favorite is that of Theodore “Teddy” Roosevelt.

“We, here in America, hold in our hands the hopes of the worlds, the fate of the coming years; and shame and disgrace will be ours if in our eyes the light of high resolve is dimmed, if we trail in the dust the golden hopes of men.”

We have an early close today ahead of the Fourth of July. We celebrate it once annually but we should all appreciate it 365 days a year. As we labor in freedom, and breath freedom – the oxygen for our souls – let’s all remember the words of Elmer Davis who said, “the United States of America will forever remain the land of the free so long as it is the home of the brave.” The following very prescient letter came to me on July 3rd of 2013, It is a moving tribute to those who serve our great nation, past, present and future. Please take a moment to read it.

Americans Don’t Understand What It Means to Serve by Nick Palmisciano

Nic Palmisciano spent six years as an infantry officer in the United States Army. He will tell you that he’ll never hold a more important job in his lifetime than platoon leader. He wrote this letter:

I remember the day I found out I got into West Point. My mom actually showed up in the hallway of my high school and waited for me to get out of class. She was bawling her eyes out and apologizing that she had opened up my admission letter. She wasn’t crying because it had been her dream for me to go there. She was crying because she knew how hard I’d worked to get in, how much I wanted to attend, and how much I wanted to be an infantry officer. I was going to get that opportunity.

That same day, two of my teachers took me aside and essentially told me the following: Nick, you’re a smart guy. You don’t have to join the military. You should go to college, instead.

I could easily write a tome defending West Point and the military as I did that day, explaining that USMA is an elite institution, that separate from that it is actually statistically much harder to enlist in the military than it is to get admitted to college, that serving the nation is a challenge that all able-bodied men should at least consider for a host of reasons, but I won’t. What I will say is that when a 16-year-old kid is being told that attending West Point is going to be bad for his future then there is a dangerous disconnect in America , and entirely too many Americans have no idea what kind of burdens our military is bearing.

-In World War II, 11.2% of the nation served in its four years.

-In Vietnam, 4.3% served in its 12 years.

-Since 2001, only 0.45% of our population has served in the Global War on Terror.

These are unbelievable statistics.

Over time, fewer and fewer people have shouldered more and more of the burden and it is only getting worse.

Our troops were sent to war in Iraq by a Congress consisting of 10% veterans with only one person having a child in the military. Taxes did not increase to pay for the war. War bonds were not sold. Gas was not regulated. In fact, the average citizen was asked to sacrifice nothing, and has sacrificed nothing unless he has chosen to out of the goodness of his heart. The only people who have sacrificed are the veterans and their families. The volunteers. The people who swore an oath to defend this nation.

You stand there, deployment after deployment and fight on. You’ve lost relationships, spent years of your lives in extreme conditions, years apart from kids you’ll never get back, and beaten your body in a way that even professional athletes don’t understand.

Then you come home to a nation that doesn’t understand.

They don’t understand suffering.

They don’t understand sacrifice.

They don’t understand why we fight for them.

They don’t understand that bad people exist.

They look at you like you’re a machine – like something is wrong with you. You are the misguided one — not them. When you get out, you sit in the college classrooms with political science teachers who discount your opinions on Iraq and Afghanistan because YOU WERE THERE and can’t understand the macro issues they gathered from books because of your bias. You watch TV shows where every vet has PTSD and the violent strain at that. Your Congress is debating your benefits, your retirement, and your pay, while they ask you to do more. But the amazing thing about you is that you all know this. You know your country will never pay back what you’ve given up. You know that the populace at large will never truly understand or appreciate what you have done for them. Hell, you know that in some circles, you will be thought of as less than normal for having worn the uniform. But you do it anyway. You do what the greatest men and women of this country have done since 1775 – YOU SERVED! Just that decision alone makes you part of an elite group.

As Winston Churchill said of World War II veterans: “Never in the field of human conflict has so much been owed by so many to so few.”

I’d like to thank the veterans who served our nation and who are an integral part of the family here at Mischler Financial Group, Inc. Thanks in particular go out to Walt Mischler, our Founder and Chairman as well as Dean Chamberlain, CEO, who blessed this small efficient special operations fighting unit known as Mischler Financial with their Service Disabled Veteran certifications that I can safely say is the most formidable in our space. Never have I met two more honorable, trustworthy and loyal men in this business.

66% of our fixed income investment banking team are Service Disabled Veterans or Veterans.

Walter Mischler, Founder and Chairman, SDV

Dean Chamberlain, CEO, Partner, SDV

Richard Tilghman, Managing Director, Public Finance

Jason Klinghoffer, CFA

Jonathan Herrick, DCM Analyst

Wishing you and your families a fabulous and safe Fourth of July!

God Bless America!
Ron Quigley, Managing Director and Head of Fixed Income Syndicate

Investment Grade New Issue Re-Cap

As expected, more than 50% of market participants took off SIFMA’s early close Monday ahead of tomorrow’s Independence Day holiday and to no one’s surprise nothing priced in our IG dollar DCM and as a result, volume is 0.00% across the boards for the WTD and MTD totals.

The IG Corporate WTD total is 0.00% of this week’s syndicate midpoint average forecast or $0.00b vs. $6.44b.

MTD we’ve priced 0.00% of the syndicate forecast for June or $0.00b vs. $84.40b.

There are now 9 IG Corporate, Yankee and/or SSA new issues in the IG credit pipeline.

Today’s IG Primary & Secondary Market Talking Points

BAML’s IG Master Index was unchanged at +115. +106 represents the post-Crisis low dating back to July 2007.

· U.S. shoots down Syrian SU-22 that bombed SDF backed-forces; Russia warns that it suspended cooperation & will track down and shoot coalition planes west of Euphrates. Potential for escalation between the U.S. & Russia is real. Turkey, Iran, Israel loom large in this scenario.

· U.S. Senate sanctions Iran for missile testing and supporting terrorism; also expands sanctions against Russia in 98-2 vote; Russia in expansion mode; meddling in international elections.

Durable Goods, Cap Goods and Manufacturing economic data all missed estimates this morning and the Supreme Court reinstated a large part of President Trump’s travel bans from six Muslim countries for a period of 90 days and 120 days for all refugees. The six countries in question are: Iran, Libya, Somalia, Sudan, Syria and Yemen. In international news, Italy bailed out two failed banks to the tune of €17b. In light of Macron’s victory in France and subsequent Parliamentary majority, it has been thought that a German-French alliance to motivate deeper EU integration would anchor the continental experiment. Instead, Italy’s state bail out opened it to EU criticism. In the end, each nation will watch over its own despite EU rules and regulations highlighting each member’s disparate individual histories, languages, borders and cultures. Germans are working to help support the quality of life in France. Such exceptions to EU laws as Italy applied today, call into question just how integrated the EU can ever be.

Peruzzi’s Perch June 23, 2017–We are finishing up a mixed bag week, with a Russell rebalance on Friday that is adding some trading volume and keeping us within striking distance of fresh all-time highs. Dow and S&P 500 index hit record closes on Monday before pulling back on Tuesday and trading mostly sideways the balance of the week. The equities market forecast would seem to indicate ‘partial clouds, but mostly blue skies.” In turn, the continued lack of equities market volatility in the US and most other major markets is contributing to rising concerns voiced by contrarians, “we remain in a state of continued complasence.” For those manning equities trading desks (and without the luxury of summer homes to escape to), this summer portends to be a scene from the Bill Murray film, Groundog Day.

Larry Peruzzi, Managing Director

Economic data was light, with decent May existing home sales numbers on Wednesday, mostly in line PMI on Friday, as well as better May new home sales. The mid-month spike in the VIX index is also subsiding as we close out the week at the 10 level, down 13% over the last two weeks. So, after some political drama, Fed rate hikes and lower oil prices, the markets continued their pace of a flat yield curve, slowly rising equities and low inflationary pressures. Some investors, such as Fundstrat Global’s Thomas Lee are starting to question the market rally duration as he cut his 2017 and 2018 S&P 500 earnings outlook.

Oil remained weak, with WTI crude down about 7% the last 2 weeks. Oil’s decline in the past would have pressured markets, but weighting adjustments are allowing us to look past it. Currently the Energy sector weighting in the S&P 500 is down to 5.86%, so oil price weakness is somewhat insulated.

Some [latecomers?] have started to question the Trump agenda, as well as current valuations and earnings expectations. But, in spite of this we continue to see new money slowly enter the market.

Retail investors seem to be fearful of missing out on the rally. We will continue to watch the option markets to see if this sentiment changes. The MSCI created some noise on Wednesday, when it approved a small weighting of Chinese A shares into the emerging market index, but it did not upgrade Argentina from frontier status to emerging status. The unexpected news in Argentina caused the Buenos Aires exchange to lose 4.8% on Wednesday, but by week’s end it had recouped 1.6% of that loss.

As we enter the final week of Q2, we expect to see some modest sector rotation and cash level adjustments. Next week we have a handful of Fed speakers out and about; Yellen, Williams, Harker and Kashkarei on Tuesday and Bullard on Thursday.

It is increasingly feeling as though this market is dealing with 2 fears; (i) valuations are stretched beyond the earnings justifications and (ii) the lack of inflationary pressures will keep real rates low for the foreseeable future. Digging a little deeper, it looks like the latter is winning. Fed Funds are pricing in a 0% chance of a rate hike in late July and only a 16% probability of a hike in September. This could be setting us up for a Ground Hogs Day movie type of summer, same thing day after day. Rinse, Repeat, Rinse Repeat.

We do see some market reactions, such as sector rotation with Energy and Retail lagging and techs, financials and health care gaining. We have also seen some increased equity risk tolerance as money flows enter the more politically stable emerging markets.

So, as investors head to the beach they will keep one eye on the sky for approaching storms and one eye on the markets for the same, but the current picture seems to be blue skies for both.

Larry Peruzzi

Managing Director International Trading

Mischler Financial Group

Investment Banking | Institutional Brokerage

Ph: 1-617-420-8472 | Cell: 1-617-997-6318

Larry Peruzzi is a 20 yr global trading markets veteran and brings a unique perspective to global equities market commentary via Mischler Financial Group, the securities industry’s oldest minority broker-dealer owned and operated by service-disabled veterans. Larry’s experience and best execution perspective stems from his sitting on ‘both sides of the aisle.’ For more than half of Larry’s career, he ran buy-side trading desks for Standish Mellon and thereafter, The Boston Company. In both of those roles, Larry was responsible for implementing and managing international equities trade execution. Larry’s perspectives are frequently cited by the leading financial news publishers, including The Wall Street Journal, Bloomberg LP and Reuters

Peruzzi’s Perch is a weekly synopsis of Everything Equities as seen from the perch of Mischler Financial Group’s International Equities Desk. Cited by Wall Street Letter in each of 2014, 2015 and 2016 for “Best Research / Broker-Dealer”, Peruzzi’s Perch is one of four distinctive content pieces produced by Mischler Financial Group

Just when the markets looked ready to crack, along came President Trump’s first overseas trip. The trip to the Middle East and Europe came at the perfect time as it took market focus off of the administration’s follies and back on the economic fundamentals.

Larry Peruzzi, Managing Director

The FOMC minutes from the May 2-3 meeting on Wednesday showed that the FED seems to be on pace for a June 14 rate hike. The FED dismissed 1Q slower growth and felt that higher broader growth is on the horizon. While the probability a June hike slightly diminished after the release, by week’s end markets had priced in a 92% chance of a 25 bps hike.

The week also saw some retailing firms release earning, and on a whole, traditional retailers continue to lose market share but investors were encouraged by pockets of strength in a few names such as Best Buy (NYSE:BBY), Home Depot (NYSE:HD), and of course, Amazon (NASDAQ:AMZN).

Crude oil’s 2 week rally rolled over as OPEC’s production cuts were seen as being insufficient. Last Saturday’s news that The United States sealed a multibillion arms deal with Saudi Arabia helped lift defense stocks such as Lockheed Martin (NYSE:LMT), General Dynamics (NYSE:GD) and Boeing (NYSE:BA) to all-time highs’. On the negative side, ISIS seemed to hit new lows in Manchester England and President Trump gave us some awkward moments at the NATO meeting on Thursday; neither was enough to keep the S&P 500 and NASDAQ from hitting new all-time highs. We continue to see institutional money flow into the market, but we also saw an uptick in retail flows entering the market. Overseas the U.K pond hit monthly low versus the Euro and U.S dollar on uncertain election polling numbers and Brazil’s bribery/ Presidential drama continues to amaze us.

Looking ahead to next week, a fair amount of data will be compressed into 4 days due to Monday’s Memorial Day holiday. April Personal Income and Spending, as well as May Conference Board consumer confidence on Tuesday gives us some insight onto the consumer sentiment and strength, while Dallas Fed manufacturing on Tuesday, Chicago Purchasing on Wednesday and May ISM manufacturing data on Thursday will shed some light on manufacturing activity and health.

The highlight of the week will be on Friday with the release of May’s employment report. The FED has repeatedly stated that the largest factor in determining future rate hikes is the Payrolls numbers. With the long weekend and the Jobs report on Friday (providing we do not see any major news out of Washington), trading volume will be skewed to the end of the week.

This week we looked at total U.S exchange volume versus the VIX index. It confirmed our belief that spikes in the VIX (May 15 to May 18) provided more trading opportunities as limits and Stops got triggered, and thus trading volumes spiked. This week however, the VIX has dropped back below 10 and trading volumes dropped by approximately 15%. Fed governors William, Brainard, Kaplin , Powel and Harker speak during the week, but investors seem to be locked in on a June 14th hike so we expect little new data from the Fed until then.

With the mid-month sell off followed by the late moth recovery investors have had to digest a lot of data points in trying to determine if we are under or overvalued. The long weekend will be welcomed, but we should not lose sight as to the meaning of the day as we honor the brave men and women who made the ultimate sacrifice.

Larry Peruzzi

Managing Director International Trading

Mischler Financial Group

Investment Banking | Institutional Brokerage

Ph: 1-617-420-8472 | Cell: 1-617-997-6318

Larry Peruzzi is a 20 yr global trading markets veteran and brings a unique perspective to global equities market commentary via Mischler Financial Group, the securities industry’s oldest minority broker-dealer owned and operated by service-disabled veterans. Larry’s experience and best execution perspective stems from his sitting on ‘both sides of the aisle.’ For more than half of Larry’s career, he ran buy-side trading desks for Standish Mellon and thereafter, The Boston Company. In both of those roles, Larry was responsible for implementing and managing international equities trade execution. Larry’s perspectives are frequently cited by the leading financial news publishers, including The Wall Street Journal, Bloomberg LP and Reuters

Peruzzi’s Perch is a weekly synopsis of Everything Equities as seen from the perch of Mischler Financial Group’s International Equities Desk. Cited by Wall Street Letter in each of 2014, 2015 and 2016 for “Best Research / Broker-Dealer”, Peruzzi’s Perch is one of four distinctive content pieces produced by Mischler Financial Group